In a world of almost limitless communication and information sharing capabilities, many consumers suffer from information overload and most have very limited time to focus on anything more than the issues necessary to conduct their day-to-day lives. As a result, many consumers often fail to recognize and make sound financial decisions simply because they are confused by too much data and/or because they do not have time to perform the analysis required to make the best decision. The result is often significant inertia with respect to making any change, even though a given change could result in significant financial advantage to the consumer. One area where this consumer inertia plays a significant role is in the area of banking and, in particular, bank accounts, and/or accounts with various other types of financial institutions, such as checking and savings accounts.
Herein, the terms “bank account” and “account” are used interchangeably and include any account with a bank or financial institution. Herein, any account with a bank or financial institution is also referred to generically as a “bank account”.
Herein the terms “bank” and “financial institution” are used interchangeably and include any entity offering a “bank account” to a consumer. Herein, any entity offering a “bank account” to a consumer is also referred to generically as a “bank”.
Currently, banks offer a wide variety of bank account types that have distinct operating parameters and features. Some examples of these bank account features include, but are not limited to: the interest rate paid and/or requirements for receiving a given interest rate; minimum balances required; maximum activity/transactions allowed; ATM/debit card privileges; ATM fees charged; on-line banking privileges; paperless statements; checking and check fees; links/data transfers to financial management systems; overdraft protection; overdraft fees charged; direct deposit capability; cash advances; and numerous other features.
These features of bank accounts are often offered in combinations that attempt to strike a balance between the interest yield associated with a given bank account and the features offered in association with the given bank account. For instance, some bank accounts pay relatively high interest but require minimum balances, and/or have limited features, and/or impose specified maximum levels of activity. In other cases, some bank accounts pay relatively low interest but include various features free of charge, or at a discounted fee. More specifically, a given bank account may pay relatively high interest but require a minimum balance, provide no ATM and/or debit card capability, and provide no checking capability. As another example, a given bank account may pay relatively high interest but charge fees for ATM use, fees for checks, fees for on-line banking, and various other fees. In contrast, another bank account may offer lower interest but offer all, or some, of these features at a lower cost, or free of charge.
Not only does the combination of bank account features vary from bank-to-bank, but it is often the case that different types of bank accounts, with different combinations of bank account features, are offered through the same bank.
With the numerous variations in the combination of bank account features available for numerous different bank accounts, most consumers can save significant money by carefully choosing a bank account having the combination of bank account features most directly aligned with the consumer's banking activity. However, as noted above, there is significant consumer inertia and bank consumers often fail to change bank accounts, despite the fact that they often would benefit from such a change. As noted above, one reason for this significant resistance to change is that the time and energy associated with the data gathering and analysis necessary to choose the best bank account is often deemed by the consumer to be too burdensome and not worth the effort involved.
As a result of the situation discussed above, every year millions of banking consumers pay more banking fees then they need to, and do not take advantage of discounted and/or free bank account benefits available though existing bank accounts offering a combination of bank account features aligned with the consumer's banking activity.